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LONDON -- Philip Morris International (PMI) is taking steps to conquer the electronic vapor market with the acquisition of Nicocigs Ltd., an electronic cigarette maker in the United Kingdom.
Nicocigs, the parent company of the Nicolites brand, holds approximately 27-percent share of the $350 million e-vapor market in the United Kingdom. The acquisition provides PMI with a well-known brand in the more developed U.K. market, as well as a 40-person sales force and a strong retail presence totaling 20,000 points of distribution, according to Bonnie Herzog, managing director of beverage, tobacco and convenience store research at Wells Fargo Securities LLC.
The move comes three months after PMI and Richmond, Va.-based The Altria Group Inc. reached an agreement to establish a strategic framework to commercialize reduced-risk tobacco products and electronic cigarettes, as CSNews Online previously reported.
Under the terms of this agreement, Altria will make its e-cigarette products exclusively available to Philip Morris for commercialization outside the United States and Philip Morris will make available two of its "candidate" reduced-risk products exclusively available to Altria for commercialization in the U.S., with the intent that someday these products may be regulated as modified risk tobacco products by the Food and Drug Administration.
"We believe this acquisition complements PMI's strategic agreement with Altria and sets the stage for PMI to be an e-vapor market leader," Herzog said.
She concluded that PMI's investments in e-vapor "will be a game changer for the global tobacco industry."